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«Contesting the streets Volume 18, number 1 • 2016 U.S. Department of Housing and Urban Development | Office of Policy Development and Research ...»

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Furthermore, HSVU leaders not affiliated with the ZL public market spend time and energy seeking underused urban public spaces that have the economic potential to become SSVAs. Such spaces include plazas, parks, sidewalks, and empty market halls in the downtown area, which, according to the urban zoning code, can be converted into SSVAs at night, on the weekends, and in other situations.

After these HSVU leaders gain the use right to such an urban space, they will divide it into lots and establish a system for respecting each stakeholder’s property rights. Next, they determine booth layout and assignment plans, rental/sublease schemes, and other programmatic and formal elements for the space. The city government generally is acquiescent of the property-right system that HSVU leaders devise. Like the ZL public market development process, conflicts of interest are typical, but city government officials generally prefer not to know (or pretend not to know). After HSVU leaders manage to change an underused urban public space into a successful SSVA, such as a night market, or a holiday open-air market, the real market value of the land will typically increase to several times what it was when HSVU leaders first leased the land from the city government.

In the ZL public market’s case, because the concession fee the HSVU leaders paid to the city government was so low during the first 9-year concession period, their profits were very high.

Some other street vendor leaders who did not belong to HSVU, or who were pessimistic about the prospects of the ZL public market at the beginning, later became jealous of the huge profits the HSVU leaders possessed and aspired to share a piece of the pie. Some of these street vendor leaders managed to garner enough political and social support to unite as a second big street vendor union, called Night Market Vendor Union (NMVU), to compete with HSVU.

Formalizing the Informal Although large street vendor organizations are able to gain more political influence and, with that, additional legal protection and formality (such as a stable business environment free from police harassment and a lower risk of capital confiscation), this condition also inevitably attracts more regulatory attention. Therefore, for a large street vendor organization, the goals of gaining more legal protection and evading authoritative supervision are sometimes incompatible with each other.

To avoid any external monitoring, a street vendor organization has to stay small and invisible, which will restrict it from garnering strong political influence.

An organization’s size not only makes it more noticeable to regulatory officials, but it also makes it an easy target for the outside entities (such as other street vendor organizations and community groups) that may use existing regulatory norms to weaken the larger organization’s competitive advantage. As long as a street vendor organization keeps growing and gaining more political influence, it may have to begin to formalize in some measure.

Cityscape 65Weng and Kim

An example of this formalization happened during the first 9-year concession period of the ZL public market. Even though the HSVU’s dominant position gave its leaders the ability to bargain down the concession fee with the city government, the high-profit margin on the concession contract attracted the attention of Taiwan’s Internal Revenue Service (TIRS), a central government agency. By conducting a rental survey to assess the “rental property market” in the ZL public market, TIRS agents were able to assess HSVU’s income and tax liability and then required HSVU to pay its fair share of the tax. In short, once the magnitude of a robust street vendor organization (that is, an informal social institution) has reached certain economies of scale, it may make more sense for it to become formal to protect its capital investment and resources.

Collusion Because the allocation of urban public spaces (such as the ZL public market and the special street vending zones) to street vendor organizations is generally sanctioned by the state, street vendor leaders will find it necessary to create collusive relationships with the agents of the state to maintain their organizations’ dominant positions in the city.

By way of illustration, even being the biggest street vendor organization in the city, HSVU still needs to win the bidding war to defend (or expand) its urban territories. If every entity bids on a level playing field, however, HSVU’s chances of outbidding others cannot be guaranteed every time. Because the stakes are high, the two biggest street vendor organizations in Hsinchu City (that is, HSVU and NMVU) both sponsor their own “clients” in the city hall. By doing so, both organizations’ leaders are able to check on each other to ensure they are not being taken advantage of.

In one rare instance, however, when the financial risk of developing an underused urban public space was so large and the potential return on investment was so immense, both the HSVU and NMVU leaders decided to share the pie together. They worked together to ensure that the bidding result unfolded as originally planned. Their aim was to acquire the usufruct right of a very big lot in the downtown area and then subdivide the benefits among themselves. In this scenario, the HSVU and NMVU leaders were able to undercut the administrative authority of the city government and reconfigure the political and economic structure of Hsinchu City. The urban territory battle takes place not only on the sidewalk but also inside city hall.

Conclusion This article points out the critical functions a street vendor organization can play during the street vendor relocation process. We explored this issue by comparing two street vendor relocation cases in the same district in Hsinchu City, Taiwan. In the first case, ZL public market, was successfully relocated by a robust street vendor organization; in the second case, the GD public market relocation failed when the city government tried to foster a street vendor organization, but the process devolved into a dysfunctional state.

At first blush, we might think the problem of relocating street vendors into an enclosed public market is a one-person static game—each affected street vendor decides for himself or herself whether to move into the market, filling one empty market booth at one time, one by one, until all

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booths in the market are filled. This article points out, however, that the street vendor relocation process is, in fact, a multiplayer dynamic game. A robust street vendor organization plays a crucial role in solving the street-vending relocation puzzle, by providing a governance institution that can better convince its members to conform to the public market plan. In addition, we found that, although spaces were not distributed evenly, they were distributed to the stronger businesses while still allowing for inclusivity of newer entrepreneurs.

The robustness of a street vendor organization affects street vendors’ incentives in such a way that they may be more willing to commit themselves to acting together and contributing to the success of the street-vending relocation process. It is a social network that bonds street vendors together and bridges diverse interests, with its own social norms and etiquette. It wields great influence on street vendors’ decisions about whether to move into the new enclosed public market and, therefore, can make or break the relocation process.

We also conclude, however, by discussing the strong political influence street vendor organization leaders may possess. Even though the city government may attempt to control and regulate street vendors with the help of the street vendor organization leaders, this approach is a double-edged sword. The recognition from the city government enables street vendor leaders to strengthen their organization’s position, expand their territory, and attract more street vendor members; with that, street vendor leaders are able to accumulate more political influence.

After gaining sufficient political clout, street vendor leaders will wield substantial influence over not only their own members but also the same city government that sanctions them in the first place. As a consequence, they can use their political connections to bypass lower-ranking officers and negotiate directly with high-ranking officers and politicians, effectively fostering a patronclient relationship that undermines the sovereignty of the city.

The future of street vendor relocation policies therefore should be designed in such a way that the city government sets the principal rules and the vendor organization implements and monitors these rules. This organization-oriented approach may represent an alternative way to solve the relocation problems; however, the system of checks and balances should also be carefully designed.

Even though the city government may need to rely on street vendor leaders’ help to facilitate the relocation process, these leaders’ power also needs to have checks for the public interest.

Acknowledgments The authors thank the following people for reviewing this article: Caroline Bird, Katherine Buckingham, Yang Chu, Christine Curella, Mariko Davidson, Micah Davison, Paul DeManche, Cara Ferrentino, Veronica Hannan, Anna Isaacson, Noah Koretz, My Lam, Katie Lorah, Kari Milchman, Anna Muessig, Jared Press, Chris Rhie, Nicole Salazar, Ali Sheppard, Faizan Siddiqi, Erica Simmons, Michael Waldrep, Louise Yeung, and Zach Youngerman. The authors also thank the Ministry of Education, Republic of China (Taiwan), for its financial assistance.

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Authors Chia Yang Weng is head of the Urban Regeneration Group in the Department of Urban Development, Hsinchu City Government.

Annette M. Kim is an associate professor and Director of the Spatial Analysis Lab, Sol Price School of Public Policy, University of Southern California.

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